May 12, 1992 PRESIDENT BUSH ON LEGAL REFORM +quot;America has become the most litigious so

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May 12, 1992 PRESIDENT BUSH ON LEGAL REFORM "America has become the most litigious society on Earth. Frivolous lawsuits are exhausting our ability to compete. If we were as good at rewarding success as we are at suing each other, we would be a century ahead of the rest of the world." President George Bush January 30, 1992 Summary: Reducing Abuse and Promoting Competitiveness o President Bush understands that promoting American competitiveness means eliminating barriers to new jobs, to new products for consumers, and to new applications of existing technology. Unfortunately, the country's obsession with the lawsuit is denying consumers new products, manufacturers new sources of income, and workers new sources of jobs. As Vice President Quayle told the American Bar Association last August, "Overuse and abuse of the civil justice system has become a self-inflicted competitive disadvantage." o President Bush's legal reforms will meet government's responsibility to provide a swift, fair, and effective civil justice system. Spearheaded by Vice President Quayle, the Bush Administration is working aggressively to reform the legal system: changing the way government lawyers handle cases, advising states on how to reform anti-competitive procedural laws, proposing cost-saving changes to the rules governing federal lawsuits, and offering a broad array of legal reforms which now await action by Congress. o The President has already signed an Executive Order implementing many of the Administration's reforms for lawyers in the federal government. However, the success of legal reform will require more than executive action. The President has asked Congress to approve the Access to Justice Act, which would enact his major reforms, as soon as possible. And the Administration has been championing important changes to the federal procedural rules before committees that will eventually report to the Supreme Court. o Comprehensive reform will also require cooperation by those in the legal profession who, until now, have all too often denied responsibility for the erosion of public confidence in our legal system. America's lawyers, more than most, have an important role to play in reforming the civil justice system to ensure its fairness and efficiency. o The net result of the President's legal reforms would be reduced costs for products and services, and fewer delays in resolving lawsuits. Many Americans in rural and urban areas, for example, would enjoy better access to health care, now denied because doctors fearing lawsuits have been unwilling to practice. The Problem: An Overburdened Civil Justice System o Many aspects of the present legal system encourage excessive and meritless litigation. The costs created by overburdened courts are borne by individuals, small businesses, and other employers in the form of excessive legal fees and high court costs. -- The ABA estimates we will have one million lawyers by the year 2000, a 34% increase in one decade. In terms of international comparisons, the United States has 281 lawyers per 100,000 citizens, whereas Japan has just 11 lawyers per 100,000 citizens. -- As the number of lawyers has grown, so has the number of cases clogging our courts. In 1989, 18 million new civil cases were filed in state and federal courts, amounting to almost one lawsuit for every ten adults. Since 1955, the number of lawsuits filed in federal courts each year has tripled, from 59,375 to 217,874 in 1990. -- It now takes over a year to resolve 40% of the lawsuits filed, and delays of 3 to 5 years are not uncommon. o Higher legal costs mean Americans pay higher prices for everything from basic consumer goods to medical treatment. -- Consumers and workers end up footing the bill for the excesses and inefficiencies of our legal system. One study calculates that the direct costs of tort litigation alone total $117 billion a year. Indeed, one in seven companies indicates that it has laid off employees because of liability concerns. The President's Agenda for Civil Justice Reform in America o President Bush is responding directly to the litigation explosion. He is challenging defenders of the status quo to step aside for the sake of competitiveness. He is challenging us to reform our legal system for the sake of American citizens denied access to real civil justice. o The President has endorsed fifty proposals devised by the Council on Competitiveness which, once enacted, will reduce litigation costs, promote swifter justice, and restore integrity to the civil justice system. None of the President's reforms will impair any substantive legal rights. They will simply ensure that deserving victims receive just compensation more quickly and at less expense. o President Bush's proposals will reduce abuse of the system, and will promote choice for parties in deciding how to resolve a dispute. Details of the President's proposals include: -- Multi-Door Courthouse -- The President's proposals would establish alternative dispute resolution (ADR) programs in designated federal courts. These programs will help litigants choose less costly and less complicated ways to resolve their disputes. The President is also calling for increased use of judicial sanctions to stop frivolous lawsuits. -- Discovery Reform -- Approximately 80% of the time and cost of a lawsuit involves discovery, the pre-trial investigation of the case's facts. The President's proposals would require automatic disclosure of basic information and mandate discovery planning conferences in federal suits. Additional discovery would be governed by incentives to prevent discovery being used as a weapon of intimidation. -- Fairness Rule -- The United States is one of the few countries that does not allow the winning party to recover the costs of litigation from the losing party. The President's proposals would reduce frivolous suits by allowing the winner to recover costs from the loser in certain types of cases. The loser would have to pay costs equal to his own costs in the suit, but would not have to pay costs if the court determines that the payment would be "unjust." -- Expert Witness Reform -- Unlike ordinary witnesses who may offer only factual testimony, expert witnesses provide special opinions which may hold added weight with juries. Many expert witnesses have become "hired guns," traveling from court to court to give testimony. The President's proposals will require federal courts to verify the legitimacy of expert witnesses, and to ascertain that their testimony is based on "widely accepted" theories instead of "junk science." The President's proposals also will ban the practice of paying fees to experts only if a successful verdict is obtained. These arrangements can tempt experts to give overly-biased testimony. -- Punitive Damages -- The current system allows unlimited punitive damages, which often generate random and indiscriminate awards unrelated to actual harm. The President's proposals would restore fairness and promote predictability by placing appropriate limits on punitive damages, dividing trials into separate phases for determining liability and damages, and requiring clear proof of malicious wrongdoing. Eliminating unpredict- ability will also reduce insurance premiums for product liability and medical malpractice coverage. o The President has also integrated civil justice reforms into other legislative proposals, including health care reform. The practice of defensive medicine, which inflates health care costs, has been widely attributed to doctors' fears of facing meritless medical malpractice suits. Abusive malpractice suits also have reduced the availability of quality health care in rural and inner-city areas. Ending exaggerated claims and reducing premiums will mean the return of physicians and vital preventive care to under-served communities. Executive Action, Congressional Delay o Despite the urgency of legal reform, Congress continues to stall action on the President's proposals: -- Medical Malpractice Reform. The President's medical malpractice reform bill has languished in Congress for almost an entire year. If enacted, this legislation would lower premium costs in rural areas and inner-cities by removing incentives to file huge damage claims. -- Comprehensive Legal Reform Legislation. President Bush transmitted the "Access to Justice Act of 1992" on February 4, 1992, which incorporates in legislation those reforms that require congressional action. To date Congress has not acted on the proposal. o Congress has also failed to pass Administration-backed product liability legislation, which would reform the product liability system by reducing the risk of excessive awards, providing for prompt payment of legitimate claims, and encouraging settlement of disputes without costly, protracted litigation. o Undaunted by congressional inaction, President Bush has used his executive authority to further the objectives of legal reform in areas that do not require legislation: -- Executive Action - President Bush signed Executive Order 12778 on October 23, 1991 implementing many of the Administration's reforms for lawyers in the federal government, thereby making the government's litigators a model for the private sector. -- Federal Rules of Civil Procedure and Evidence - President Bush has asked the Supreme Court, through its rule-making committees to amend many of the Federal Rules of Civil Procedure and Evidence to incorporate proposed evidence and discovery reforms. -- Model State Legislation - Most of the reforms President Bush has proposed for the federal system are just as needed in the states. To facilitate state reform, the Administration has published Civil Justice Reform Model State Amendments and the Model Punitive Damages Act to serve as blueprints for state reforms, and the Justice Department and Council on Competitiveness are working with states to enact these and other related reforms. Since most civil litigation occurs at the state level, reforms implemented through state legislatures will have a dramatic impact.

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